In our personal lives, many of us search for a soulmate: the perfect, compatible partner that shares our values and interests with whom we can enjoy a long and joyful relationship. 

Finding the right company to manufacture the product you have so much hope for is not much different: You need to find a compatible partner with whom you can enjoy a long and mutually rewarding relationship.

Selecting a manufacturing partner or supplier is not as simple as choosing a top tier company or one that is the least expensive. Most of the time, the cheapest options end up costing you more in the long run and the top tier might not be the right fit for your business. 

To find a life partner, you need to know what you’re looking for before you can go searching for it; it’s the same in business. To find the best-suited contract manufacturer or supplier for your business there are certain steps you need to take:

Step #1- Selection Criteria

Similar to matchmaking websites where you list what you’re looking for in a future partner, you need to have a list of the capabilities and criteria you want your manufacturing partner to have, from production and packaging capabilities to programs, standards, registrations, certifications and so on. Some of these are values that are important to you, such as sustainable production capabilities, and some are must-have criteria dictated by regulations or industry standards. 

Searching for a manufacturing partner without selection criteria is like going grocery shopping hungry and without a shopping list – we all know what we end up buying! If you don’t know what you need to look for, do your homework and ask experts in the field to help you.

Step # 2- Qualifying the Right Partner

Many new-to-the-industry startups rely on good, old Google search to find a manufacturing partner. Those who have been in the industry for a while may use a myriad of tools from trade associations to certification organizations to asking experts in the industry. 

No matter what method you use, you need to look for qualified partners matching the selection criteria you decided on in Step #1. 

A few months ago, I was referred to someone who launched a new food snack. She had found her manufacturer through Google search. During a routine Health Department inspection, they found that the facility’s FDA registration had expired and as such any products made after the expiration date were considered adulterated and could not be sold – including the snacks made for this new start up. The startup owner didn’t even know that in order to produce food a facility must be registered with the FDA! 

This lack of knowledge cost her her investment and her dream. This type of risk is not limited to new start ups: Even in established companies these things happen quite often. In the rush to launch a new product, many companies don’t bother to come up with their selection criteria before searching for a manufacturing partner. Even if they do have a list of criteria, they often make shortcuts and exemptions that come back to haunt them. 

If you don’t know what capabilities to look for and how to assess potential partners, enlist industry experts to help you. This investment in time and money has a high ROI and will prevent many mishaps and losses in the future.

Step 3- Contract or Legal Agreement

It is mind-boggling how many major business relationships are still happening based on a handshake, phone call, or other informal agreement. Like many of you, I don’t like to bother with contract negotiations or (with all due respect to my lawyer friends) get stuck in a back-and-forth between attorneys. 

But one of the lessons I’ve learned in the past 25+ years in the industry has been “if it is not written, it does not exist”. Writing down your mutual agreements from abiding to standards and requirements (a.k.a., selection criteria) to product specification, cost, volume, and lead times is the least fun part of starting a new relationship. It’s like talking about money and finances when you are dating: awkward and uncomfortable. 

But the most successful relationships in life are built on a mutual, clear understanding of expectations – it is no different in business. Negotiating and signing an agreement is a small battle you have to fight to gain long-lasting peace! 

Step 4- Managing Performance

Your contract is in place and production has started, so you’re done, right? 

Not exactly. Real life is not like the story books where “The End” means happily ever after. 

Once the honeymoon is over, the hard work begins – making the relationship work and thrive. It’s the same in business: Once the relationship is established, the real work of managing performance and ensuring a sustainable and mutually successful business relationship begins. 

The alternative is no easier: Getting out of a relationship that has gone bad through negligence can be as painful as getting a divorce. To avoid that, you have to first find the right partner, then continuously work on managing and nourishing the relationship. 

From establishing expectations to creating effective communication channels and getting the work done, you need many soft and hard skills to help you manage this relationship. If you don’t have those skill sets in-house, hiring industry experts is an investment that will have a high ROI, making it well worth the cost. 

Step 5- Continuous Improvement

Just like in personal relationships, in spite of all of your efforts things may not go exactly according to your wishes. The key here is to keep the communication channels open and respectful. Looking for solutions rather than finger pointing and playing the blame game is the key to:

• restoring relationships
• learning from mistakes
• making things even better than before

Mutually-agreed-upon performance metrics are great tools that help business partners identify and work on improvement opportunities based on facts rather than emotions. Develop these performance metrics based on your agreed-upon expectations and agreements, then use them to have ongoing positive and productive conversations with your suppliers and co-manufacturers. 

This helps identify issues in their infancy so you can stop them from becoming major problems. As the old saying goes:

“If you can’t explain it, it can’t be measured, and if it is not measured, it can’t be managed.”

Finding and keeping the right partners in business takes a lot of hard work; but like anything else in life, good things are worth the effort! 

If you need experts to help you in any or all of the steps above visit our website at www.JITExpertsHive.com or email us at info@jitexpertshive.com.